Anti-scab legislation ‘another percolating employment issue’

By Tony Poland, LegalMatters Staff • With a renewed focus on anti-replacement worker legislation at the federal and provincial level it is important to consider what it could ultimately mean to companies and their workers, says Toronto employment lawyer Jeffrey M. Andrew.

“It is another percolating employment issue,” says Andrew, a partner with Cavalluzzo LLP. “We are seeing a rise in workers advancing their rights in the current economic climate and one of the ways they are doing it is by advocating for anti-replacement worker legislation. It is an interesting issue and each side has their own arguments as to why they think it’s unfair and why their position is more appropriate.”

In March, New Democratic Party MPPs re-introduced anti-scab legislation to prohibit the use of replacement workers during strikes. At a press conference announcing the Anti-Scab Labour Act 2023, NDP MPP for Windsor West, Lisa Gretzky, said it was “absolutely appalling” that employers are allowed to bring in replacement workers to fill jobs during lockouts and strikes.

The federal government has stated it is “committed to introduce legislation by the end of 2023 to prohibit the use of replacement workers in federally regulated sectors.”

The government asked the general public to share their views on the issue in a three-month consultation period that ended in January.

Unions share three key concerns

Unions that participated in the consultations shared three key concerns with allowing employers to use replacement workers, arguing that using replacement workers:

• violates workers’ right to strike and causes an imbalance in collective bargaining;
• creates tensions on picket lines and in the workplace; and
• threatens workplace safety as well as public safety.

Employers opposed to anti-replacement legislation countered with concerns that “disruptions due to work stoppages could have serious negative impact on the Canadian supply chain.”   

“According to them, this could result in a series of consequences, including harming the safety and security of Canadians, reducing Canada’s competitiveness as a trading partner and a place to do business, and damaging the Canadian economy,” the government stated. 

Andrew tells LegalMattersCanada.ca that anti-replacement worker legislation is not a new concept. Both Quebec and British Columbia have laws against using what is colloquially known as scab workers.

The Ontario NDP government brought in legislation in the early 1990s but it was struck down after the Conservatives took power in 1995.

“Federally, there are protections under the Canada Labour Code that prohibit employers from hiring replacement workers if they are using them to undermine a union’s ability to represent its members,” Andrew explains. “The legislation is pretty limited, so it is understandable that unions would say it is mostly ineffectual.”

In Ontario, employers are currently permitted to use managers or supervisors to continue operations during a strike or lockout, he says. They can also hire replacement workers or use employees in the bargaining unit who must cross the picket lines, says Andrew.

‘Replacement workers are a real concern for unions’

“Replacement workers are a real concern for unions. They have always felt very strongly that they are already at a disadvantage because many big companies have the financial resources to ride out a strike,” he says, “Meanwhile union members are people who are paying mortgages and raising children. They don’t have the same kind of financial wherewithal to last a strike or lockout.” 

That concern is echoed by CUPE national president Mark Hancock, who called on the federal government to enact legislation.

“It’s appalling that in Canada, in the 21st century, we still have a system that allows employers to lock out their workers, and then hire replacement workers to take their jobs. All so they can avoid negotiating a fair contract with their employees. That has to stop now,” he says.

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But the ability to hire replacement workers is not the overwhelming advantage to employers many may assume, says Andrew.

“It can lead to a number of difficulties,” he says. “The employer will likely have to train the new workers so there is an added expense involved. A bigger problem, I believe, is in the vast majority of cases, strikes or lockouts end and people go back to work. Then you are faced with the fallout. 

“Allowing replacement workers can lengthen the strike and embitter employees. This can affect labour relations in the future,” adds Andrew. “Sophisticated employers realize that. They understand it could it could exacerbate the problem. Some do not use them for that reason.” 

Negative impact on both sides

Studies have claimed that anti-scab legislation can have a negative impact on both sides.

“Empirical research – based on the experience in British Columbia and Quebec (and a brief ban in Ontario) – shows there are several negative consequences associated with banning temporary replacement workers, both on the broader economy (investment, wages, and jobs) and labour relations (the frequency and duration of strikes),” states the Fraser Institute. 

Legislation makes it “more difficult and costly for an employer to operate or serve customers during a work stoppage, and this affords union negotiators a marked advantage during collective bargaining by increasing the financial pressure that employers face during a work stoppage,” according to The Economic Effects of Banning Temporary Replacement Workers, published by the Institute.

“Meanwhile, workers participating in a strike are able to lessen their own financial pressure by finding employment elsewhere while the strike or lockout is underway. Unions can also provide strike pay to cushion the financial impact on workers. There is a clear imbalance in the way the law is applied to employers on the one hand, and unionized workers on the other.”

The report states that studies have found direct banning temporary replacement workers could turn investors away from “doing business in a jurisdiction with a ban because the ban can raise labour costs and lower the return on investment,” which could in turn hurt employees.

‘Lead to more frequent and longer strikes’

“The bans discourage investment and ultimately lead to worse outcomes for workers in the long term, including lower wages and fewer job opportunities,” according to the report. “Critically, the bans not only discourage existing businesses in a jurisdiction from investing, but they also discourage businesses located elsewhere from investing in a jurisdiction with a ban. And contrary to arguments made by proponents of bans, they lead to more frequent and longer strikes, causing increased labour strife.”

Andrew says the ever-changing business landscape also presents challenges to anti-replacement legislation. 

“Today, a great number of people work remotely,” he says. “There will be challenges to enforce any ban when a worker has crossed the picket line digitally. However, many still require the physical presence of workers. Regardless, there is no question that use of replacement workers causes a significant deterioration of labour relations that often lasts long after a labour dispute ends.”

“In the end, it is an interesting debate with both sides making compelling arguments.”